The document discusses forecasting and production planning for a leather manufacturing company in Bangladesh. It provides background on Bangladesh's leather industry, which employs over 500,000 people and has potential for $5 billion in exports. The company uses exponential smoothing to forecast demand, basing each new forecast on the previous forecast adjusted by 10% of the difference between the actual and forecasted values of the prior period. Applying this method, the forecasted demand for 2017 is calculated as 1950.3 units. Forecasting helps companies plan operations, accounting, marketing and other functions.

1. Frantic #5

2. Develop a Production
Plan Using a Level
Forecasting Strategy

3. Forecasting
Forecasting is a statement about the future. It is estimating
future event (variable), by casting forward past data. Past data
are systematically combined in predetermined way to obtain
the estimate. Forecasting is not guessing or prediction.

4. Forecasting Help Managers to:
• Plan the system
• Plan the use of system

5. Those area of major area that are effected by changing
in forecast is given below: -
• Accounting, Finance
• Human resources
• Marketing
• MIS
• Operations
• Product / Service Design
Forecasts Affect Decisions and
Activities Throughout an
Organization:

6. Leather Industry of
Bangladesh

7. Bangladesh is an ideal offshore location for low-cost
and high-quality leather and leather products
manufacturing.
 The entire leather sector meets only 0.5% of the world’s
leather trade worth US$75 billion.
 113 tanneries in Bangladesh that produce 180 million
square feet of hides and skins per year.
 There are about 30 modern shoe manufacturing plants
engaged in the production of high-quality footwear.
 Over 2500 smaller footwear manufacturers also present in
the sector.

8.  There are around 100 small-to-medium leather
goods manufacturers, and a small number of niche
larger manufacturers.
 Directly employs approximately 558, 000 people.
 Local leather experts calculate potential exports at
$5 billion.

9.  Leather Goods: leather garments, footwear
and leather goods, such as office bags,
purses, wallets, belts, luggage, etc.
 Finished leather as production inputs for
furniture, the automotive industry, etc.
Sub-Sector Best Prospects

10. Opportunities
 U.S. brands can buy high-quality leather goods and
footwear from Bangladesh at competitive prices –
action that is already being taken by two major U.S.
department store chains.
 Joint venture partnerships.
 Trade delegations from Bangladesh to the United
States and vice-versa to showcase Bangladeshi
leather products and the new tannery estate in
Savar.

11. Leather and Leather
Goods Export of
Bangladesh

12. Over 250 manufacturers are producing various Leather items such as
travel goods, suitcases, briefcases and fashion accessories, along with
belts, wallets, hand bags, case holders etc. for overseas export.
Bangladesh has also entered the field of Leather fashion garments with
items of distinction and prestige.
The leather goods producing enterprises only a few in number (15-20
units) with product lines relating to travel goods, suitcases, briefcases and
fashion accessories, along with belts, wallets, hand bags, case holders
etc. for overseas export. Export of leather goods made of Ostrich bird
leather, is a unique collection amongst many other exciting products made
of goatskins, cow calf, Buff-Calf etc.

13. The stages or steps in a production forecasting process are
listed that they follow:
1. Fixing the forecasting objectives.
2. Determining the time frame.
3. Collecting the data for forecasting.
4. Select the forecasting model
5. Build and test the forecasting model.
6. Prepare the forecasts.
7. Compare events with the forecasts.
Production Planning &
Forecasting Process:

14. Development of
Leather Industry in
Bangladesh

15. Strength Weakness
Opportunities Threat
SWOT Analysis

16. Forecasting of Leather
Manufacturer

17. Exponential Smoothing
Exponential smoothing is a sophisticated
weighted averaging method that is still relatively
easy to use and understand. Each new forecast
is based on the previous forecast plus a
percentage of the difference between that
forecast and the actual value of the series at that
point.

18. Next forecast = Previous forecast + (Actual - Previous
forecast) where (Actual Previous forecast) represents
the forecast error and is a percentage of the error.
More concisely,
Ft = Ft-1 + α (At-1 - Ft-1)
Ft Forecast for period t
F t -1 Forecast for the previous period (i.e., period t -
1)
α = Smoothing constant (percentage)
A t -1 Actual demand or sales for the previous period
Formula

19. Year Demand Forecasting Demand
2010 1269 1300
2011 1581 1540
2012 1754 1900
2013 2133 1770
2014 2071 1900
2015 1919 2100
2016 1953 1950
For identifying the forecasting, we have to need
a production plan to know how it works.
So we will present a lather manufacturing
factory so that we can know about the
forecasting plan.

20. 2010 2011 2012 2013 2014 2015 2016
Demand 1269 1581 1754 2133 2071 1919 1953
Forecasting Demand 1300 1540 1900 1770 1900 2100 1950
0
500
1000
1500
2000
2500
Demand
&
ForecastingDemnad
Year
Demand Forecasting Demand

21. Now we need to forecast the demand for 2017 in
the market according to the following data.
Solution:
Here we have to find out the forecasting demand of 2017.
At first in 2017, forecasting demand = Ft-1 + α (At-1 – Ft-1)
= 1950 + .10 (1953 – 1950)
= 1950.3
So, the forecasting demand for 2017 is 1950.3 units.

22. Conclusion